These States Still Tax Social Security Benefits for Retirees

The majority of states do not impose taxes on Social Security benefits.

Published: 12/19/2025, 6:01:56 PM EST

These States Still Tax Social Security Benefits for Retirees — A Social Security Administration (SSA) office in Washington on March 26, 2025. (Saul Loeb/AFP via Getty Images)

Although the vast majority of states do not tax Social Security benefits, residents in certain areas may still be required to pay state taxes on that income.

Fewer than a dozen states still tax Social Security payments, including Montana, Utah, Colorado, New Mexico, Minnesota, Connecticut, Rhode Island, and Vermont, according to financial services firm Fidelity Investments.

Rules pertaining to taxes on benefits vary from state to state, but are generally based on income levels, similar to the federal government's thresholds.

For example, in Montana, benefits are fully deductible for single and joint filers with an adjusted gross income of less than $25,000 and $32,000, respectively.

The Utah legislature increased its Social Security income threshold this year, eliminating taxes for single filers earning up to $54,000 and married couples filing jointly earning $90,000.

"Once again, we are prioritizing caring for seniors on fixed incomes, supporting young families and championing upward mobility for all Utahns," Senate President J. Stuart Adams said in a March 2025 statement.

"Thanks to Utah’s robust economy and our steadfast conservative policies, we’re putting money back where it belongs—with the people who earned it."

Kansas and Missouri previously eliminated state taxes on Social Security benefits in 2024.

Nebraska began phasing out its tax in 2022, with 40 percent of benefits excluded that year. The deduction increased to 60 percent for 2023, 80 percent for 2024, with full exemption for the 2025 tax year.

Social Security accounts for approximately one-fourth of the entire federal budget of the United States. (mikeledray/Shutterstock) — Social Security accounts for approximately one-fourth of the entire federal budget of the United States. mikeledray/Shutterstock

West Virginia will no longer collect taxes on benefits beginning with the 2026 tax year. The region also began phasing out its state income tax on Social Security starting in early 2024, when the taxable portion of Social Security income was reduced by 35 percent. The reduction increased to 65 percent for 2025.

In July, President Donald Trump signed into law the "One Big Beautiful Bill," which provided an additional $6,000 tax deduction for those 65 and older through 2028, among other provisions.

The Social Security Administration called the bill "a landmark piece of legislation that delivers long-awaited tax relief to millions of older Americans."

"This is a historic step forward for America's seniors," Social Security Commissioner Frank Bisignano said. "For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans. By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump's promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they've earned."

According to a June 2025 analysis by the United States Council of Economic Advisers, an estimated 88 percent of all people receiving Social Security income—about 51.4 million seniors—will pay no taxes on their benefits under the new bill.

"This amounts to the largest tax break in history for America’s seniors—and makes sure that after years of earning their Social Security, seniors can save more of their money," the White House noted. "Promises made, promises kept."